New Directions

The Fairest Tax of All and the Only Tax We Need

I expect that everyone would agree that in order for a country, state, or city to function it needs money. For millenia these entities have obtained money, and still do, via a variety of charges imposed on the people in these locales. We usually call these charges “taxes”. Over the centuries many types of taxes have been created: income taxes, excise taxes, property taxes, estate taxes, road use taxes, automobile taxes, boat taxes, sales taxes, poll taxes, Social Security taxes, value added taxes, financial transaction taxes, capital gains taxes, and so forth. There seems to be a semi-infinite list of the different types of taxes. Why?

Indeed. Why do we need so many types of taxes? The fact is we don’t. The reason we have all these different types of taxes is that governments generally become corrupt and one special interest group or another gains an upper hand and uses their power to shift the tax burden to another, less powerful group of people. After a few centuries of this process we are left we a rat’s nest of taxes that manages to tax the some dollars over and over again, while other dollars never get taxed at all. There has never been a better demonstration of the power of special interests and oligarchs.

The solution is a single tax that is fair for all people and raises sufficient money so that the country, state, or city can perform its functions appropriately. The answer is not the so-called “Fair Tax” – a deliberate and viciously deceptive misnomer if there ever was one. That miserable concept is in fact one of the most unfair tax concepts ever created. It is simply another example of how the wealthy oligarchs of this country try to impose their merciless will upon the average person. The “Fair Tax” is nothing more than a national sales tax. The problem with this is that it taxes everything you buy: bread, milk, clothing, newspapers, gasoline, medical care, school supplies – everything you need to live – at the same rate as it taxes the playthings of the extraordinarily wealthy – things like 10 carat diamonds, 100 foot yachts, thirty room mansions, and so forth. So what’s wrong with that? The problem is that even the fabulously wealthy don’t buy a lot of those items so these things don’t produce a lot of tax revenue. Most of the budgetary needs of the cities and states have to be made up from the sales of bread and milk and so forth. In this way the poor and indigent, the vast numbers of people living paycheck to pay check, and the families struggling to just get by pay pretty much the same tax as the wealthiest billionaires on most days. It is, in fact, “The Unfair Tax”.

The fairest tax of all is the graduated income tax: it is a tax that taxes small incomes very lightly and massive incomes heavily. Those who can pay the most do so and those who cannot afford to pay anything don’t pay anything. Beyond being extraordinarily fair, the graduated income tax has another potential: it can, by itself, pay all the expenses of the budget of a state, city, or country. And that is a very good thing.

Consider our present situation. You have a job and maybe you make $1,000 a month. You pay $100 income tax per month. Then you take your money and you go out and by gas for you car. Suppose you buy $10 worth of gas. You only really get $9 worth of gas because the other dollar is for the gasoline tax – and really, it’s just a tax upon the money you have already paid an income tax upon! Then you go to the grocery store and buy food. Same thing. Then you buy clothes. Same thing – you pay taxes on money that has already been taxed. Then you get your property tax bill in the mail. You’ve already paid for your house (with money that was taxed) and now you have to pay a tax again based upon how much you paid for the house. Your money that was already taxed is being taxed again – and it will be taxed again next year, and the year after, and the year after. Indefinitely.

Our entire system of commerce contains taxes upon money that has already been taxed at least once. It is the poor and middle class who suffer the most from this system because, proportionally, they have a much larger tax burden than the wealthy who have written all sorts of income tax, and other tax exemptions, for themselves into law and then pay only a small percentage of their income for the necessities of life – after all, they don’t worry about a sales tax on food because you can only eat so many hamburgers, even if you are a billionaire.

If the leadership of this country really wanted to give a boost to the economy they would scrap our present complex system of national, state, and local taxes and create a single, sole, nationally controlled graduated income tax – and then outlaw all other forms of taxation. The government would then distribute these tax dollars to various states and cities in a manner proportional to their population so they can perform their functions of government. Such a tax would be fair and useful for the common good.

But we will never do that because, despite the fact that we vote for senators and representatives, we live in an oligarchy. Even our now corrupt Supreme Court rules that wealthy, and inanimate, corporations have the same free speech rights as living people – a ruling that defies sanity but allows the wealthy owners of these corporations to drown out the voice of the individual citizen. We live in a society where lobbyists carry bags of money to our elected officials, and they, in turn, create legislation on demand – for a fee. We live in a society where the financial burden of paying for the expenses of the country is placed squarely upon the poor and the middle class while many of the most wealthy pay nothing – yes, nothing – in taxes. And our Congress likes it that way.

A single, fair, graduated income tax is all this nation needs to function. Furthermore, the lifting of all sales, excise, transaction, property and other taxes upon commerce would produce a gigantic stimulus for our economy. There is, however, only one problem with my dream of having only one truly fair tax for all.

6 Responses

The current Income Tax system is a psychotic legal system and only gets worse year after year after year.

Citizens and businesses of this country spend close to 140 Billion Dollars a year and spend 7 Billion Hours in attempted tax compliance.

The Income Tax code itself is 70,000 pages of arbitrary and contradictory laws and opinions.

This plus at least a million more pages of Revenue Rulings, Letter Rulings, Tax Memorandums, Tax Publications, Tax Court, Federal Court and Supreme Court Opinions that are written in an effort to explain the mind numbing Income Tax code.

Most personal, financial and business decisions all have to take into account the Income Tax system and generally require assistance from tax accountants and lawyers who themselves do not even understand the Income Tax code.

The income tax does not “catch” criminals who earn big money. So it isn’t fair, no matter how you look at it, and in fact in the present situation in which less and less tax is being collected, the income-tax-model may be costing us more than the taxes we collect! Think about the government agencies that have to be paid out of tax dollars collected in order to pursue criminal tax cheats. It’s mind boggling.

The only really fair tax is a tax on purchases, minus food and medicine, that catches all. People who spend more pay more, people who spend less pay less, but everyone pays something,and criminals pay too when they purchase. More is collected as people use (even their ill gotten gains) their money to create more wealth for themselves and spend more, which helps the tax take.

It isn’t the income-tax take that makes our country more free (actually it makes the US less free and stimulates cheating, which really cheats everyone else who pays taxes, not just the government, so it’s doubly nasty).

A comparison of economies of nations that are more free than the US is striking: Hong Kong, Singapoore, Australia, New Zealand, Switerland — all more economically free than the US, all economies doing better than the US.

The more tax paid, the less free we are. The people nattering about ‘fairness’ do not promote it, but slavery without any fairness at all.

Fair would be paying voluntarily through spending, not through earning. And because those who earn more spend more voluntarily, that’s fair.

Don’t delude yourselves. You are just keeping the same old totalitarian system going. It may work for a while more but won’t work for very long.

How does this equate to fair using any definition of the word? Fair is the equivalent of equitable. At the least it is without bias or favouritism. So how can it be fair for different people to pay different amounts in taxes? Especially when there is bias/favouritism used to determine who fits in which bracket?

Whilst I understand it would never really work, the fairest tax system would be dependent on what you are actually trying to accomplish.

The first option is to charge every individual the same dollar amount (can’t get much more fair than that). So the government would need to determine the national expenditure for the previous year, divide that by the population, thus determining what each individual needs to pay in taxes for that year.

The second option is to determine how much each individual is costing their country, then charging them for the cost. Obviously this wouldn’t result in equal taxes for everyone, but it would result in everyone paying for what they cost their country.

What is not fair is a sliding scale for taxes. It can never be fair to take a higher percentage of person A’s wages than person B’s wages, nor is it fair to take the same percentage of their wages if they earn different amounts.

I have often fantasized about one tax as well. It would eliminate an enourmous amount of red tape and waste. The economic boom that would result would be exceed any boom in at least the last 100 yeras. I don’t care what is used, progressive tax or sales tax, I would just like one tax.

Your description of the “fair tax” is inaccurate. Under the “fair tax”, Uncle Sam would send every person in the country an annual “rebate” of about 20-25% of the poverty level to offset the first part of his/her tax. There will be NO other taxes collected by the federal government. The very poorest people will actually make money off the “fair tax” since they pay less than the rebate.

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